Wednesday, June 27, 2012

.
Finding that the Defense of Marriage Act's (DOMA's) denial of equal
benefits to same-sex couples violates the Equal Protection Clause of the
Fifth Amendment, a federal court judge has awarded the surviving spouse
of a lesbian couple reimbursement for the tax bill she paid on her
wife's estate.

Edith Windsor and Thea Spyer became engaged in 1967 and were married in Canada
in 2007, although they lived in New York City. Ordinarily, spouses can
leave any amount of property to their spouses free of federal estate
tax. But when Ms. Spyer died in 2009, Ms. Windsor, now 82, had to pay Ms
Spyer's estate tax bill because of DOMA, a 1996 law that denies federal
recognition of gay marriages.

Although New York State considered the couple married, the federal
government did not and taxed Ms. Syper's estate as though the two were
not married. Ms. Windsor sued the U.S. government seeking to have DOMA
declared unconstitutional and asking for a refund of the more than
$350,000 in estate taxes she was forced to pay.

Federal court judge Barbara Jones from the U.S. District Court for
the Southern District of New York ruled that there was no rational basis
for DOMA's prohibition on recognizing same-sex marriages. Jones stated
that it was unclear how DOMA preserves traditional marriage, which is
one of the stated purposes of the law.

As ElderLawAnswers reported last
year, President Obama decided to stop defending DOMA, so members of
Congress formed an advisory group to defend the law. This is the fifth
case to strike down DOMA.

Friday, June 22, 2012

. You buy a dilapidated house and in the course of renovations
you find a huge amount of money hidden in the walls. The cash is yours,
right? Not according to an Arizona appeals court, which recently ruled
that $500,000 found in the walls of a house belongs to the heirs of the
man who put it there, not to the house’s current owners.

Robert A. Spann had a habit of hiding cash and other
valuables in unusual places in the homes he lived in. His two daughters
knew of his pattern, and for seven years after he died in 2001 they
found stocks and bonds, as well as hundreds of military-style green
ammunition cans, some of which contained gold or cash, hidden throughout
his Paradise Valley, Arizona, home.

In 2008, the daughters sold the rundown house “as is” to a
couple. The couple did some remodeling, in the course of which a worker
for the contracting company found two ammunition cans full of cash in
the kitchen wall and another two inside the framing of an upstairs
bathroom. The cash totaled $500,000. After the worker
reported the find to his boss, the boss took the cans but did not tell
the couple who owned the house about them. The worker, however,
eventually informed the couple of the discovery and the police
ultimately took control of the $500,000.

The couple and the contractor sued each other for the money.
In the meantime, Robert Spann’s daughter Karen Grande, who was the
personal representative of his estate, filed a petition in probate court
on behalf of the estate to recover the money. The two cases were
consolidated in June 2009.

The trial court ruled that the money belonged to the estate and
the couple appealed, claiming that Mr. Spann’s family had abandoned the
cash by leaving it in the house when it was sold “as is.”

In a May 31, 2012, ruling, the Court of Appeals of Arizona
agrees with the trial court. The court rules that while “finders
keepers” may work on the schoolyard, in Arizona in order to abandon
personal property, “one must voluntarily and intentionally give up a
known right.” The court finds that because there is no evidence
that Mr. Spann’s estate intended to relinquish any valuable items in the
house, the money is more properly characterized as “mislaid” and still
belongs to the estate.

To read the full text of the Arizona appeals court’s decision in the case, Grande v. Jennings, click here.

Interestingly, an Oregon appeals court came to a different conclusion in a very similar case four years ago. For details, click here.

Wednesday, June 20, 2012

.
While it is important to have an updated estate plan, there is a lot
of information that your heirs should know that doesn't necessarily fit
into a will, trust or other components of an estate plan. The solution
is a letter of instruction, which can provide your heirs with guidance
if you die or become incapacitated.

A letter of instruction is a
legally non-binding document that gives your heirs information crucial
to helping them tie up your affairs. Without such a letter, it can be
easy for heirs to miss important items or become overwhelmed trying to
sort through all the documents you left behind.

The following are some
items that can be included in a letter:

A list of people to contact when you die and a list of beneficiaries of your estate plan

The location of important documents, such as your will, insurance policies, financial statements, deeds, and birth certificate

A list of assets, such as bank accounts, investment accounts, insurance policies, real estate holdings, and military benefits

Monday, June 11, 2012

. Prices for long-term care insurance policies jumped between 6
and 17 percent in the past year, according to an industry survey.

A
55-year-old couple purchasing long-term care insurance protection can
expect to pay $2,700 a year (combined) for about $340,000 of current
benefits, according to the 2012 Long-Term Care Insurance Price Index, an
annual report from theAmerican Association for Long-Term Care Insurance. The same coverage would have cost the couple $2,350 in 2011.

The
steep price rise is primarily due to historic low interest rates and
yields on fixed-income investments, explained Jesse Slome, the
Association’s executive director, in a press release.
Between 40 and 60 percent of the dollars an insurer accumulates to pay
future claims comes from investment returns, Slome said, noting that for
every one-half percent drop in interest rates an insurer needs about a
15 percent premium increase to maintain the projected net profit.

The
Association annually analyzes what consumers will pay for the most
popular policies offered by ten leading long-term care insurance
carriers. The study found that the average cost for a 55-year-old single
individual who qualified for preferred health discounts is $1,720 for
between $165,000 and $200,000 of current coverage. In 2011, the same
coverage would have cost an average of $1,480 annually.The
policies the Association priced all include a 3 percent compound
inflation growth factor, meaning that a 60-year-old couple buying
$340,000 of current coverage today would see their benefit pool grow to
$610,000 when they reach age 80. According to the report, the
couple could expect to pay about $3,335 a year if both spouses qualified
for preferred health discounts.

The study suggests that
it’s more important than ever to shop around for coverage because the
range between the lowest-cost and the highest-cost policy has increased
compared to the prior year. "For the 55-year-old single policy applicant
the highest-priced policy cost almost 80 percent more than the
lowest-priced policy," Slome noted. "For some categories, the difference
was as much as 132 percent and no single company always had the lowest
nor the highest rate, which is why we stress the importance of
comparison shopping." Nearly three-quarters of buyers opt for a 3- to 5-year benefit period, the Association reports.

Policyholders
can experience rate rises after they purchase, although long-term care
insurers are allowed to raise prices only on a class of policyholders,
not on individuals ones, and they must receive state approval for the
rate hike.

The complete 2012 Price Index will be published in the Association's 2012 Long-Term Care Insurance Sourcebook. For more information, visit theAmerican Association for Long-Term Care Insurance'sWeb site.

For an article on how to cope with long-term care insurance rate hikes, click here.

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About Me

Mr. Swinton received his J.D. at Pace University School of Law from which he graduated Cum Laude, as a Ranking Scholar and winner of the American Jurisprudence Award for Excellent Achievement in the Study of Wills and Trusts.

In addition to his membership in the National Association of Elder Law Attorneys (NAELA) Mr. Swinton is a member of the American Bar Association, New Jersey State Bar Association, and the Union County Bar Association.